How To Pay For College: 9 Ways According to Experts (2024)

Saving Money / Education

By Allison Hache April 28, 2023
  • College Savings Plans
  • Dual Enrollment
  • Employer Tuition Assistance
  • Federal Financial Aid
  • Grants
  • Part-Time Job
  • Personal Savings
  • Private Loans
  • Scholarships
  • Using Free Money

How To Pay For College: 9 Ways According to Experts (2)

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Take one look at the cost of a college education and you might ask, “How do parents afford college?” In-state tuition at a public school averages $9,377 per year. You can expect to spend more than $37,000 on average at a private school.

Read: How To Build Your Savings From Scratch

How Do Parents Afford College?

Families use savings, scholarships, grants and loans to pay for college, according to Sallie Mae’s “How America Pays for College 2022” report. More than half of relied on savings and income. Less than one-fifth borrowed money to cover the costs. There are many ways to pay tuition. A little creativity goes a long way toward finding funding sources. The list below highlights some of the more popular options.

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1. College Savings Plans

College savings plans, such as 529 plans, and Coverdell education savings accounts, are the most common tools parents use to save for college. A 529 plan is also called a qualified tuition program. This tax-advantaged account may function as a pre-paid college fund where the money in the account grows tax-deferred. Withdrawals for qualified education expenses are tax-free.

Make Your Money Work for You

Coverdell ESAs provide parents with more options, but they limit contributions to $2,000 per year, per beneficiary. Like with a 529 plan, withdrawals from Coverdell ESAs are tax-free as long the money is used on qualified education expenses. These accounts also have added flexibility. Parents can use the funds for certain expenses like private school tuition, tutoring or special needs services before students enter college.

2. Dual Enrollment

Dual enrollment is a program offered to high school students that lets them take college-level courses. For each course they complete, they earn both high school and college credits. In some cases, these students graduate from high school with an associate’s degree that they can apply toward a bachelor’s degree. Not only does this save them time, but it also can save money. Some states offer dual enrollment through school districts as a perk, which means students are earning the degree without paying for it.

3. Employer Tuition Assistance

Employers sometimes offer tuition assistance programs for workers and their families. They use them as a recruiting tool–part of a benefits package–and as a way to bridge skills gaps in the workforce. This package can vary since the company decides who qualifies, how much it’s willing to pay and any other requirements.

Colleges and universities sometimes offer tuition assistance for employees and their family members who want to attend that school. These programs typically only cover the cost of tuition and fees, and don’t usually include room and board and books. Some programs may pay all or a percentage of the tuition.

Make Your Money Work for You

4. Federal Financial Aid

The federal government offers three types of financial aid: grants, work-study and loans. To qualify for aid, students must complete the Free Application for Federal Student Aid, or FAFSA, and meet the requirements for the aid.

One of the more popular federal aid programs is the Pell Grant. More than one-third of students qualify for and receive one of these grants. Pell Grants are available to undergraduate students who have not yet earned a degree and demonstrate an exceptional financial need.

More From Your Money: Choose a high-interest saving, checking, CD, or investing account from our list of top banks to start saving today.

College students who are willing to teach in a public school for a period of time after graduation may qualify for a Teacher Education Assistance for College and Higher Education, also known as a TEACH grant. Some schools also participate in the Federal Supplemental Educational Opportunity, or FSEOG, grant program.

Other options include the Federal Work-Study program, in which qualifying students work part-time and earn federal minimum wage. Loans are also available in amounts between $5,500 to $12,500 per year for undergraduates and up to $20,500 for graduate students.

Make Your Money Work for You

5. Grants

In addition to federal grants, students can apply for state and local grants to help pay for college. The qualifications and award amounts can vary, depending on the organization offering the grant. ‘For example, Florida offers a need-based grant for all students that starts at $200. In Illinois and Washington, students may qualify for a grant that pays their tuition costs. Some grants have strict requirements and are available only to students who attend a specific school, belong to a particular group or complete qualifying activities.

6. Part-Time Job

Going to school full-time is a full-time job. A student taking a full course load typically spends about 12 hours per week attending class. The time spent studying is two to three times that amount. This adds up to between 36 and 48 hours each week. That leaves plenty of time for a part-time job.

Popular jobs for college students include waiting tables and tutoring. Many work in retail as well. A side hustle like rideshare driving or making deliveries also can go toward a college education.

7. Personal Savings

Parents and students use personal savings or investments to fund a college education. In fact, 37% of parents and 39% of students turned to their own savings in 2021 for all or part of their college expenses. These numbers do not include 529 plans and Coverdell ESAs.

One advantage of setting aside money in a savings account is liquidity. The money can be used for any college-related expense and does not have to meet eligibility requirements required by tax-advantaged accounts. Keeping the money in a high-yield savings account also encourages the children to take part in savings by contributing some of the money they earn from work or receive as gifts.

8. Private Loans

Banks, credit unions and other agencies offer private student loans for students who have already borrowed the maximum allowed by the federal student loan program or do not qualify for it.

These loans tend to be more costly than federal student loans, with rates ranging from around 4.50% to more than 16% APY, compared to a fixed rate of 4.99% to 7.54% for federal loans. Also, private student loans do not qualify for federal and state-sponsored loan forgiveness programs. For these reasons, they tend to be a last-resort option.

9. Scholarships

A majority of college students–60%–rely on scholarships to pay for their college education. Scholarships are often known as free money since they don’t have to be paid back. However. students typically have to meet certain requirements to qualify for them. In some cases, the student must maintain a specific grade point average or participate in a club. Others look at athletic or artistic performance.

The organization sponsoring the scholarship determines the eligibility requirements. Some individuals funding the award may participate in the selection process. These organizations can include colleges, membership organizations and friends and families honoring someone’s legacy.

What Are 3 Ways to Pay for College with Free Money?

It’s possible to earn a college degree without borrowing money–and plenty of students do just that. Students who qualify for scholarships and grants usually don’t have to pay back the money they receive as long as they meet the criteria for the award.

For example, TEACH grant recipients who do not meet their obligation to teach for a specified period of time will have to pay back the award amount, as it converts to a loan. Students who live in a state that offers a dual enrollment program at no cost to the student also have an opportunity to earn a degree for free.

College Is an Investment

For many people, the cost of a college degree is an investment in a more stable financial future. The median pay for someone with a bachelor’s degree was $1,334 per week in 2021, compared to $809 per week for a high school graduate. Over a lifetime, this difference adds up to more than $1 million.

Having a college degree also may hedge against job loss. Individuals with a bachelor’s degree tend to have lower rates of unemployment than high school graduates.

Final Take

Students have plenty of options for funding a college education. Tthe most common way to pay for college is through a combination of sources, including savings, scholarships and loans. The key is to start saving as early as possible, make use of tax-advantaged accounts and apply for a variety of scholarships and grants to form a complete financial aid package. Income from a job and student loans can fill in the gaps as needed.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

How To Pay For College: 9 Ways According to Experts (2024)


How To Pay For College: 9 Ways According to Experts? ›

Students and families who do not qualify for Federal Pell Grants and Institutional need-based aid have several different options including scholarships, Federal Work Study, Federal loans for students, Federal loans for parents, private educational loans, and family savings and out-of-pocket payments, including payment ...

What are the main ways to pay for college? ›

6 Best Ways to Pay for College
  • College Savings Plans. Families can save for future college costs using a 529 plan. ...
  • Federal Financial Aid. ...
  • Grants and Scholarships. ...
  • Cash From Savings. ...
  • Work During School. ...
  • Private Loans. ...
  • Choosing a Cheaper College. ...
  • Studying Abroad.
Nov 10, 2022

What are 6 ways to pay for college? ›

  • Scholarships. Scholarships offer money for college that does not need to be paid back. ...
  • Grants. Grants, like scholarships, do not need to be repaid. ...
  • Work-Study. A work-study program provides part-time employment opportunities while you're in school. ...
  • Your Own Income and Savings. ...
  • Federal Student Loans. ...
  • Private Student Loans.
Nov 1, 2022

How do you pay for college step by step? ›

Your 5 step guide to paying for college
  1. Step 1: Complete the FAFSA after October 1. ...
  2. Step 2: Apply for scholarships. ...
  3. Step 3: Estimate and compare your total college costs. ...
  4. Step 4: Determine if you need additional money for college. ...
  5. Step 5: Additional college financing options.

What are the options to pay for college without loans? ›

  • Apply for Grants. ...
  • Scholarships. ...
  • Ask for More Money. ...
  • Get a Work-Study Job. ...
  • Take Required Core Classes at the Local Community College. ...
  • Live Off Campus. ...
  • Take Advantage of Employer Reimbursement Programs. ...
  • Ask Friends, Family, and Even Strangers.
Nov 29, 2022

What are 5 ways you can pay for college? ›

Top 5 Ways to Pay for College: College Financial Aid, Explained
  • Apply for a Scholarship. Scholarships are typically merit-based. ...
  • Apply for a College Grant. College grants are need-based, and like scholarships, grants don't have to be repaid. ...
  • College Work Study. ...
  • Federal Student Loans. ...
  • Private Student Loans.

How do middle class families pay for college? ›

Students and families who do not qualify for Federal Pell Grants and Institutional need-based aid have several different options including scholarships, Federal Work Study, Federal loans for students, Federal loans for parents, private educational loans, and family savings and out-of-pocket payments, including payment ...

How can I pay for college smartly? ›

Some types of financial aid are better than others, so use the following advice in this order when planning how to pay for college:
  1. Fill out the FAFSA. ...
  2. Search for scholarships. ...
  3. Choose an affordable school. ...
  4. Use grants if you qualify. ...
  5. Get a work-study job. ...
  6. Tap your savings. ...
  7. Take out federal loans if you have to.
Dec 7, 2022

What are 3 ways you pay for college if you do not have any money? ›

Here are nine ways to pay for college with no money:
  • Apply for scholarships.
  • Apply for financial aid and grants.
  • Consider going to community college or trade school first.
  • Negotiate with the college for more financial aid.
  • Get a work-study job.
  • Trim your expenses.
  • Take out federal student loans.
Oct 26, 2022

Do most parents pay for college? ›

How much do parents pay for college? During the 2021/2022 school year, the average parent covered about 43% of their student's college costs using income and savings. Parents covered an additional 8% of that cost by taking out loans, according to the Sallie Mae study.

Are step parents responsible for college tuition? ›

The federal government considers the student's parents, including the stepparent if the custodial parent has remarried, as having the primary responsibility to pay for the student's college education.

What is the first step in paying for college? ›

Fill out a FAFSA

Filling out the Free Application for Federal Student Aid should be every student's first step in paying for college. Also called the FAFSA, this is how the government assesses your finances — and your family's — and determines how much your family should expect to put toward the cost of college.

How do my parents pay for college? ›

Most families pay for college using some combination of savings, income and financial aid. Financial aid is money you receive to help cover college costs. Some financial aid, like grants and scholarships, doesn't need to be repaid. Financial aid can also come in the form of loans — money you have to repay.

What is an alternative loan for college? ›

Alternative, or private loans are educational loans that exist outside of the federal financial aid program. To be approved for an alternative loan, the borrower must be credit worthy or have a credit worthy co-signer. The majority of alternative loans are borrowed in the student's name (with a parent as a co-signer).

How can I afford college without working? ›

How can I pay for college without working? Scholarships and grants are two ways that you can pay for college without working. Both options give you money for college that you don't have to pay back.

How can I pay for college without a cosigner? ›

Federal student loans don't require credit history or a co-signer. They're also the most flexible when it's time to repay, so use them first. But to afford college, some students may need private student loans, which are credit-based. A small number of private lenders offer student loans without a co-signer.

What type of loan is best for college students? ›

A subsidized loan is your best option. With these loans, the federal government pays the interest charges for you while you're in college. Here are the types of student loans.

What are the three types of money for college? ›

Grants, work-study, loans, and scholarships help make college or career school affordable.

How to get a loan to pay for college? ›

How do I get a federal student loan? To apply for a federal student loan, you must first complete and submit a Free Application for Federal Student Aid (FAFSA®) form. Based on the results of your FAFSA form, your college or career school will send you a financial aid offer, which may include federal student loans.

What is the family income limit for FAFSA? ›

The Free Application for Federal Student Aid, better known as the FAFSA, helps potential and current college students get scholarships, grants, work-study programs and federal student loans. There are no income limits to apply.

What salary is too high for financial aid? ›

There is no set income limit for eligibility to qualify for financial aid through. You'll need to fill out the FAFSA every year to see what you qualify for at your college. It's important to make sure you fill out the FAFSA as quickly as possible once it opens on October 1st for the following school year.

How much money can your parents make and still get financial aid? ›

There are no income limits on the FAFSA. Instead, your eligibility for federal student aid depends on how much your college costs and what your family should contribute. Learn how your FAFSA eligibility is calculated and other ways to pay for college if you don't qualify for federal student aid.

Does anyone pay full price for college? ›

Higher income students are more likely to pay full price. As this table shows, college students are about twice as likely to pay full price at a public four-year college as they are at a private, non-profit four-year college (28 percent and 13 percent of freshmen, respectively).

How do you spend money wisely in college? ›

Ten Tips for Managing Your Money in College
  1. Keep your money in a fee-free checking account. ...
  2. Find a good savings account. ...
  3. Spend as little as possible on books. ...
  4. Take advantage of free food. ...
  5. Use credit cards wisely. ...
  6. Limit your loan borrowing. ...
  7. Use your student discount. ...
  8. Don't waste your meal plan.

How do you talk about paying for college? ›

Start Early

Explain how much you expect to be able to pay and how much you will need your child to pay. Investigate public resources about how much college usually costs and what types of education you can afford to pursue. Explain how merit financial aid is linked to grades and performance on the ACT or SAT tests.

Why not eligible for Pell Grant? ›

You are not eligible to receive a Federal Pell Grant if you are incarcerated in a federal or state penal institution or are subject to an involuntary civil commitment upon completion of a period of incarceration for a forcible or nonforcible sexual offense.

What if my parents make a lot of money but won t pay for college? ›

File the FAFSA as an independent student

If your parents or guardians refuse to pay for college, your best options may be to file the FAFSA as an independent. Independent filers are not required to include information about their parents' income or assets.

What percentage of income are parents expected to pay for college? ›

The FAFSA formula doesn't expect students or families to use all of their adjusted available income to pay for college. The formula allocates 50 percent of a dependent student's adjusted available income to cover college expenses and anywhere from 22 to 47 percent of parents' available income.

Why do colleges ask how much your parents make? ›

As with your parents' education, colleges want to know your parents' occupations for demographic purposes. This also provides some insight into your background and circumstances. Think in broad or general terms when selected form the list of occupations, since a parent's specific job may not be available as a choice.

Do colleges look at parents savings? ›

Colleges will expect parents to use up to 5.64 percent of their assets toward college. Protected Assets. The asset protection allowance was eliminated in the 2023-2024 FAFSA, which means all of a family's assets are taken into account in the federal aid calculation.

Does FAFSA take step parents income? ›

If you have a stepparent who is married to the legal parent whose information you're reporting, you must provide information about that stepparent as well. EXCEPTION: The FAFSA form asks about your parents' education level.

Which parent to put on FAFSA? ›

The parent you lived with most during the last 12 months. If you didn't live more with one parent, provide information about the parent who provided more financial support during the last 12 months or during the most recent year that you received support from a parent.

What to do with your first paycheck out of college? ›

What To Do With Your First Paycheck
  1. Start an emergency fund. Your first step when earning a regular salary should be to start an emergency fund. ...
  2. Open a savings account. ...
  3. Start saving for your retirement. ...
  4. Make a payment toward your student loan. ...
  5. Budget wisely.

What are the 4 types of college loans? ›

There are four types of federal student loans: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans and Direct Consolidation Loans. Private student loans are issued through institutions like banks, credit unions, schools and even state agencies.

Is there a better option than student loans? ›

You have several student loan alternatives that could help with managing the costs of going to school. Alternatives to student loans include grants, scholarships, and work-study programs. You might also use savings or income from a part-time job to pay for school.

Can I live off of college loans? ›

You can use student loans for almost any education-related expense — meaning you can potentially live on them. However, keep in mind that some loans come with student loan limits that will determine how much you can borrow.

How to avoid student loans? ›

Tips to Avoid Student Debt
  1. Embrace Hybrid Learning. ...
  2. Determine to Pay Cash for Your Education. ...
  3. Transfer Credits. ...
  4. Apply for All Aid You Can. ...
  5. Test Out of Courses. ...
  6. Work On-Campus. ...
  7. Take on a Part-Time Job. ...
  8. Discuss Repayment Plans.

Can I afford college if I don't have savings? ›

Scholarships and grants are one way to put money in your pocket if you don't have college savings. Federal grants, like the Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG), are given to students who demonstrate financial need based on information submitted through the FAFSA.

Can my child get a student loan on their own? ›

You can get a private student loan without a parent, as well, but there's a pretty big catch. Private student loans generally require a creditworthy cosigner, but the cosigner does not need to be your parents. Someone else with a good or excellent credit score can cosign the loan.

Is Sallie Mae worth it? ›

Sallie Mae is a four-star lender based on NerdWallet's student loan rating system. Our ratings prioritize low interest rates and flexible repayment options that allow borrowers to repay loans faster and avoid default.

What loans can a student get without a cosigner? ›

Federal direct unsubsidized loans are available to all undergraduate and graduate borrowers regardless of financial need, and there's no co-signer required. They don't come with a break on interest like subsidized loans do, so as an undergraduate, be sure to max out subsidized loans before turning to unsubsidized ones.

What student loans do parents not have to cosign? ›

Parents don't have to cosign student loans. Your child likely won't need a cosigner for federal loans since most of them don't require a credit check. But since federal loans have a borrowing limit, your child may have to turn to private loans to fill in funding gaps.

What is the best way to pay off college? ›

Paying a little extra each month can reduce the interest you pay and reduce your total cost of your loan over time. Continue to make monthly payments even if you've satisfied future payments, and you'll pay off your loan faster.

How do parents afford college? ›

Most families pay for college using some combination of savings, income and financial aid. Financial aid is money you receive to help cover college costs. Some financial aid, like grants and scholarships, doesn't need to be repaid. Financial aid can also come in the form of loans — money you have to repay.

How can I pay for college and not be in debt? ›

17 Ways to Go to College Debt-Free
  1. Attend a Public School as an In-State Student. ...
  2. Attend Community College. ...
  3. Attend Online College. ...
  4. Attend a No-Loan College. ...
  5. Save With a 529 Plan. ...
  6. Earn Scholarships. ...
  7. Earn Grants. ...
  8. Participate in a Work-Study Program.

How much is too much for fafsa? ›

There is no set income limit for eligibility to qualify for financial aid through. You'll need to fill out the FAFSA every year to see what you qualify for at your college. It's important to make sure you fill out the FAFSA as quickly as possible once it opens on October 1st for the following school year.

What are the 5 money types? ›

Five common money personalities are investors, savers, big spenders, debtors, and shoppers. Debtors and shoppers may tend to spend more money than is advisable. Investors and savers may overlap in personality traits when it comes to managing household money.

What are the 7 characteristics of money? ›

The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability.
Let's run down our list of characteristics to see how they stack up.
  • Durability. ...
  • Portability. ...
  • Divisibility. ...
  • Uniformity. ...
  • Limited supply. ...
  • Acceptability.

What are the 6 characteristics of money? ›

In order for money to function well as a medium of ex- change, store of value, or unit of account, it must possess six characteristics: divisible, portable, acceptable, scarce, durable, and stable in value.

How to pay off 50k in student loans? ›

Here are six ways to make paying off $50,000 in student loans more manageable:
  1. Refinance your student loans.
  2. Find a cosigner to refinance your $50,000 loan.
  3. Explore your forgiveness options.
  4. Enroll in autopay.
  5. Explore income-driven repayment plans.
  6. Use the debt avalanche method.
Feb 2, 2022

What is the most common college loan? ›

Direct Subsidized and Direct Unsubsidized Loans (also known as Stafford Loans) are the most common type of federal student loans for undergrad and graduate students.


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